News To Follow the Delinearization of Music and Video

In the last ten years worldwide the music industry value chain has been fully reshuffled by iTunes and some early predecessors. In the last five years the video industry has been changing with the massive international success of YouTube. News content is next to see this scale of international change.

Change is always too fast and too painful

In 2001 iTunes was launched. It was a new way to access music through an approach called delinearization. This barbarian concept takes the old-fashioned 4P marketing idea from the 1960s and makes it work in the digital 21st century world of digital media; the right song (and not the full album), at the right price, to the right customer with the right UI or placement. Twelve years later, having completely reshaped the music industry and the value chain, one billion songs are downloaded on iTunes every month (Source: asymco.com).

Video has been similar. In 2006, Google bought YouTube for 1.6B USD in stocks. Six years later, aside from the fact that none claim anymore that Google paid an insane price for a losing money startup; YouTube has radically changed the video and TV industries with a new way to access video: delinearization. YouTube alone is streaming more than five billion videos per day (estimate based on 2012 YouTube blog figures), and attracts 1.8B monthly unique visitor (Source: Google adplanner).

Over the past few years, hundreds of services have been launched capitalizing on music and video delinearization. Hulu, Netflix, Pandora, Spotify, Dailymotion are high profile examples.

The news industry has a similar DNA to that of music and videos

So, after music and video, what will be the next content to be delinearized at a worldwide mass market level?

News will be the next big market for these reasons:

1. Like music and video, the news industry is a massive international, cross-gender, cross-cultural and cross- generational provider of content. News offers a unique opportunity. It is a holy land. News is part of each of us. I love to tell journalists that this is the first period in the history of civilization that so many people spend so much time reading so much news. There is a lot of data to back up this claim.

2. Video and music sites prove that the more relevant content is offered, the more end-users will consume this content, and the more their content appetite increases. The usage demonstrated on RSS readers and news aggregators shows the link between the number of news items and the time spent per user browsing this news. News Republic® (a news mobile app produced by the company I run, Mobiles Republic) end user using an Android phone views an average of 323 pages per month, compare that to 104 pages per month per unique visitor for Le Monde (Source: OJD).

3. Just as the music and video markets experienced huge changes, the news industry has to manage a serious crisis on upstream and downstream levels: digitalization, multiplication of information streams, and new distribution channels. The number of challenges adds up to not an evolution but a metamorphosis that I like to call the Media-morphosis.

4. Clearly the most painful challenge for those in the news business is coping with the rapidly changing business model. Consumers expect to have access to content for free, or almost free. Fifty-seven percent of readers believe news must be free. (Source: International Market Study Mobiles Republic).

Media-morphosis is evident worldwide

This media-morphosis on the web was triggered by Yahoo News and Google News. In May 2013 Yahoo News generated more than 76 million unique visitors, more than the audience of CNN ─ plus, Washington Post readers, represented one third of the total Internet audience in the U.S. (Source: comScore).

This trend is even more powerful and visible on mobile devices such as smartphones and tablets in terms of the acquisition of new users and the number of unique visitors. In the U.S. alone, the top ten Google Play applications include six news aggregators. On the U.S. Apple Store, five out of the top 20 applications are news aggregators. Other interesting facts include: CNN’s mobile app has four million monthly unique visitors in the U.S.; USA Today’s mobile app has three million monthly unique visitors, two leading mobile news syndicators in US, Feedly and Flipboard, have 5 million monthly unique visitors (Source: comScore July 2013).

We also see this shift confirmed with the News Republic mobile app in Europe. In France, it is in the top ten in unique visitors and in the top 20 in pages viewed (Source: OJD + internal). We see similar trends in Italy and Germany.

It is certain that the landscape is changing rapidly for news publishers. The ubiquity of the mobile ecosystem is feeding a demand for news on a widespread scale never witnessed before in our world’s history. To succeed, news publishers must find ways and means to broadly distribute their content, in a trusted and timely manner in new ways that satisfies the trend of delinearization so that the mobile news consumer can find trusted news, when then want it, how they want it, in easy to read, compelling and free formats.

So, what are the consequences for the news publishers? What will be the changes in the value chain? How should news publishers position themselves? We will explore these issues in the next post. Stay tuned.

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Who is this guy?

Gilles is the CEO & Founder of News Republic, publisher of news application for smartphones, tablets, and TV. Federating more than 1,000 publishers worldwide such as Reuters, Associated Press, The Independent, CNN International, Al Jazeera, and Gizmodo …Read More

Why My Thoughts on it?

Running a media company, working directly with more than 1,000 news publishers from regions all over the world, having lived and worked on three continents, after three start ups and 20 years of experience in digital content and mobile technology, many success and mistakes, and wrong interpretations…Read More

On the settee…

Back in the nineties, Cyril started his career as an architect of embedded software. At the turn of the millennium, he created Alcatel’s first WiFi product line in partnership with the Israeli startup Alvarion. He filed three patents in the digital modulation domain.
After an MBA at INSEAD in 2001, he started a new life as an early stage investor, first for a Silicon Valley VC fund (Telesoft Partners), which taught him the underpinnings of the Venture world, and then for a German VC fund (Munich-based DVCG), where he focused on software and mobility. He joined XAnge in Paris in 2007 as a Partner and member of the Executive Committee.
Cyril holds a Masters’ degree in Engineering from Telecom Paris Tech as well as an MBA from INSEAD.
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